I guess I would also add that the thrust behind the "run by morons concept" is that the business should still be thriving while it is being run by morons. The idea is that it will be an even greater business under geniuses. So the troughs will still be palatable and the peaks will be ecstasy. Just buying a business in trouble because it is being run by morons doesn't make sense to me. The trough then becomes unpalatable, and the peak may be just average or worse.|
As well, we must always be wary of the latter situation, since it is not entirely certain that a genius will be able to turn the business around at all. The qualitative judgements become quite important.
I happen to like Disney a lot. I agree with those that say the ESPN franchise is worth the ABC price. I think that they are making the right net moves, but with poor execution and without regard to creating shareholder value through correct pricing. In the 21ish range, I'd buy some. I've already bought a tiny itty bit for a family member who thought she should own some (she also had to have GAP), but that's just in a portfolio I manage, not one of my own.
Now I've just been asked to manage a couple custodial counts for a couple just-born nieces. They'll need the money in 18 years. And you can bet Disney will be going in those too, at the right price.